The document provides an overview of IFRS 17, the new accounting standard for insurance contracts. It discusses the key impacts of IFRS 17, including new financial reporting requirements. It also examines some of the challenges insurers may face in implementing IFRS 17 and potential solutions, such as the use of data, analytics and digital technologies from IBM.

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© 2014 IBM Corporation
IFRS 17 – Insurance Contracts and
Issues facing the Insurance Sector
Presenter: Paul Young, CPA, CGA – Customer Success Manager - Architect
Day: October 24, 2022

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© 2014 IBM Corporation
Paul Young - Bio
• CPA, CGA
• Academia (PF1, FA4, FN2, MU1. and
MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Business Process Change
• SME – Financial Solutions
• SME – Macro/Micro Indicators
• SME – Supply Chain Management
• SME – Data, AI, Security, and Platform
• SME – Internal Controls and Auditing
Contact information email: Paul_Young_CGA@hotmail.com
LinkedIn: https://www.linkedin.com/in/paul-young-055632b/
SlideShare - https://www.slideshare.net/paulyoungcga
Twitter: https://twitter.com/paulyoungcpa
Youtube - https://www.youtube.com/user/youngercga1968/videos

3. © 2012 IBM Corporation
• Introductory
• What is IFRS 17
• Impact of IFRS 17
• Look at the reporting requirement
• Issues at hand
• Solutions for IFRS 17
• Blog – Insurance -
Agenda

4. © 2012 IBM Corporation
Introductory
• Any major standards will require detail planning. This presentation discusses IFRS17
which will be in full force by 2021.
• 2021 may seen a long way off, but it will take companies a few years to align their
processes to meet the new standard.
September 9,
2014

5. © 2012 IBM Corporation
What is IFRS 17
September 9,
2014
https://home.kpmg.com/xx/en/home/insights/2017/05/insurance-
contracts-new-standard-first-impressions-ifrs17-ifrs4-180517.html or
https://www.iasplus.com/en/news/2018/11/ifrs-17-effective-date

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IFRS / Insurance
September 9,
2014

7. © 2012 IBM Corporation
IFRS and FASB
Source - https://www.ifrs.org/news-and-events/2017/11/what-investors-ask-about-ifrs-17/
September 9,
2014
The main exception relates to the United States. Under US GAAP, US
insurers apply different requirements depending on the type of insurance
contract they issue (for example, short-term insurance contracts or long-
term insurance contracts). The US Financial Accounting Standards
Board is working on a project to improve, simplify and enhance the
financial reporting requirements for long-term insurance contracts issued
by companies using US GAAP. Some of the proposed changes to US
GAAP, if confirmed, are expected to reduce the differences between
IFRS 17 and existing US GAAP, including the use of current
assumptions. However, the two sets of requirements will remain different.

8. © 2012 IBM Corporation
FASB / Insurance Contracts
Source - https://legerityfinancials.com/ldti-explained/
September 9,
2014

9. © 2012 IBM Corporation
IFRS – 17 Work Plan
https://www.ifrs.org/supporting-implementation/supporting-materials-by-ifrs-standard/ifrs-17/
September 9,
2014

10. © 2012 IBM Corporation
What is the impact of IFRS 17
https://www.pwc.com/ca/en/industries/insurance/ifrs17.html
September 9,
2014
PWC – April 26, 2017

11. © 2012 IBM Corporation
Old F/S – Insurance Company
Source – Lloyds of London
September 9,
2014

12. © 2012 IBM Corporation
Old F/S – Insurance Company
Source – Lloyds of London
September 9,
2014

13. © 2012 IBM Corporation
Old F/S – Insurance Company
Source – Lloyds of London
September 9,
2014

14. © 2012 IBM Corporation
Feeder and Sub-Ledger Systems
Source – Deloitte Inc -
https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/financial-services/ch-fs-
white-paper-ifrs-17.pdf
September 9,
2014

15. © 2012 IBM Corporation
New F/S – Insurance Contracts
Source – Deloitte Inc
September 9,
2014

16. © 2012 IBM Corporation
Financial Statements / Earned Premium Approach
Source - http://zanders.eu/en/latest-insights/ifrs-17-insurance-contracts/
September 9,
2014

17. © 2012 IBM Corporation
Financial Statements / Insurance Contract Revenue
Source - http://zanders.eu/en/latest-insights/ifrs-17-insurance-contracts/
September 9,
2014

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Financial Statements / Insurance Contract Expenses
Source - http://zanders.eu/en/latest-insights/ifrs-17-insurance-contracts/
September 9,
2014

19. © 2012 IBM Corporation
Canada
Source - https://www.canadianunderwriter.ca/insurance/with-the-pandemic-abated-osfi-
restarts-work-on-ifrs-17-1004195689/
September 9,
2014

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United States
Source – KPMG
September 9,
2014

21. © 2012 IBM Corporation
Amendments
Source - https://www.bakertilly.com/insights/accounting-insights-4
September 9,
2014

22. © 2012 IBM Corporation
Cybersecurity and Insurance
All of which is further escalation of a worrisome trend: A recent report by Hiscox shows insured cyber losses of $1.8
billion in 2019, up an eye-popping 50% year over year.
Facing the prospect of major financial fallout from an attack, C-suites around the world have turned to cyber insurance.
Insurers are issuing more policies, and the amounts of protection available are increasing. In 2020, according to data
proprietary to the team I lead, the global insurance community saw the first cyber insurance program to exceed $1
billion — and the second.
However, the momentum that has propelled the sector this far may be running out. The cyber insurance sector may
still be in its infancy, but there are signs that it is hit a (hopefully temporary) plateau. There are a few likely causes for
this slowed growth. On the demand side, despite the spate of cyberattacks, some companies are buying less cyber
insurance or not buying any at all, as economic strain from Covid-19 has caused some of them to look at cyber
insurance as a luxury. And while more attacks could stimulate demand, they also create a supply problem, making
insurers warier of providing cover and reinsurers (who provide insurance for insurance providers) less interested in
backing cyber liabilities. On top of that, the lack of historical loss data (resulting from the sector’s short history) adds
another layer of unpredictability for all involved.
https://hbr.org/2021/01/cybersecurity-insurance-has-a-big-problem
More and more companies are looking Data and AI solutions as part of mitigating issues with cybersecurity attacks:
Security Products - https://www.ibm.com/security/products
My work on small to medium-size businesses adoption of technology
https://ibm.box.com/s/gddg93fwok0zx36ew41vpynz827qprvw
` September 9,
2014

23. © 2012 IBM Corporation
Climate Change and Insurance
September 9,
2014
Blog – Insurance and Climate Change
Many people in Germany were blindsided by the heavy rains and deadly flooding that hit parts of the country in mid-
July. Now, as homeowners take stock of the damage, a second shock could be in store when they take a look at their
insurance policies.
Homeowner's insurance in Germany covers water damage, but not if it's caused by heavy rains or natural flooding. For
this, property owners need to purchase special coverage against weather damage.
Such caveats, which aren't exclusive to Germany, pose problems in a world where unpredictable weather is becoming
the norm. Higher global temperatures can lead to increased precipitation, making floods more likely, according to the
United Nations Environment Programme.
Insurance against severe weather is an "urgently needed" addition to standard homeowner's insurance, Sascha Straub, a
finance lawyer working for a consumer consultancy in Bavaria, told DW.
"The damage that water can cause is so immense that it can ultimately be a complete economic disaster for the
individual," said Straub. "And now we see the likelihood that it will also affect those who haven't had to reckon with
water before."
Source - https://www.dw.com/en/how-do-you-insure-yourself-against-climate-change/a-58568248
Both the public and private sectors need to look at ways to mitigate the effects of climate through use of data, AI,
Platform, and Security:
Data and AI – https://ibm.box.com/s/6w39nl609pl1gv1p49lsp87fme7pjlwv
Crisis and Emergency Management - https://ibm.box.com/s/rsp6p9tez8uru9fo0wu5d13bxt7rtrr0
Audit/GRC - https://ibm.box.com/s/noi1j6ixzl6ralxkm4g0zzs911wf6s76
Risk Management - https://ibm.box.com/s/256kgjvqjzt37st8gar9qyezhp3816b5
ESG Reporting - https://ibm.box.com/s/vmyitcackqevvm1hcxv7wke6gudrpnce

24. © 2012 IBM Corporation
Planning Analytics / Insurance
September 9,
2014

25. © 2012 IBM Corporation
Financial Planning and Analysis
September 9,
2014

26. © 2012 IBM Corporation
Data Fabric
September 9,
2014

27. © 2012 IBM Corporation
Digital Transformation for Insurance
September 9,
2014

28. © 2012 IBM Corporation
Automating insurance processing
September 9,
2014

29. © 2012 IBM Corporation
Weather Risks
September 9,
2014

30. © 2012 IBM Corporation
Insurance and Climate
September 9,
2014
Blog – Weather Catastrophes drives record Insurance Losses -
https://www.linkedin.com/pulse/blog-weather-catastrophes-drives-record-insurance-
losses-paul-young/?published=t

31. © 2012 IBM Corporation
ESG Metrics
September 9,
2014

32. © 2012 IBM Corporation
Where does IBM Fit into IFRS 17
• Artificial Intelligence – Watson Analytics - https://www.ibm.com/ca-
en/marketplace/watson-analytics
• Planning Analytics -
• Risk Analytics - https://www.ibm.com/blogs/insights-on-
business/banking/ifrs-adoption-what-it-means-its-impact-and-best-
practices/
• Cognos Analytics -
https://www.ibm.com/support/knowledgecenter/en/SSEP7J_11.0.0/com.i
bm.swg.ba.cognos.wig_cr.doc/c_gtstd_ica_overview.html
September 9,
2014